Honolulu, Hawaii



RE:    S.B. No. 646

       S.D. 1




Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii




     Your Committee on Transportation, to which was referred S.B. No. 646 entitled:




begs leave to report as follows:


     The purpose and intent of this measure is to improve roadways in the State by increasing the amount of the rental motor vehicle surcharge tax from $5 to $8 for any county with a resident population of more than 125,000, but less than 195,000, and depositing the revenue from the increased surcharge tax into that county's subaccount within the State highway fund.


     Your Committee received testimony in support of this measure from the Department of Transportation and Maui Chamber of Commerce.  Your Committee received testimony in opposition to this measure from Avis Budget Group and Enterprise Holdings.  Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.


     Your Committee finds that this measure will increase funding to improve roadways by increasing the surcharge tax on rental motor vehicles for counties with a certain population.


     Your Committee understands the concerns addressed by the testimony from Avis Budget Group and Enterprise Holdings and acknowledges that rental car companies have been especially hurt by the continuing coronavirus 2019 (COVID-19) pandemic.  It is the desire of your Committee that when a final effective date is inserted into this measure, should it proceed, it will be a date that accounts for economic recovery from the effects of the COVID‑19 pandemic.


     Your Committee has amended this measure by:


     (1)  Inserting an effective date of January 1, 2050, to encourage further discussion; and


     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.


     As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 646, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 646, S.D. 1, and be referred to your Committee on Ways and Means.


Respectfully submitted on behalf of the members of the Committee on Transportation,